Are E - Banks in trouble?

lambdb · #1 08-23-2007, 05:39 PM

With the wrath of the sub prime market yet to unravel, we have seen some the recent correction attributed to hedge funds which were over exposed to the sub prime risk. There have been some mention on CNBC about the E banks being overexposed as well.

It may be a cause for concern in the upcoming future, I don't know the regulations that some of the E banks have though.

Thoughts or is that just another catalyst for unnessecary panic?

lambdb

maxtower · #2 08-23-2007, 06:32 PM

They might be but your money shouldn't. FDIC

adios · #3 08-23-2007, 06:47 PM

Only up to $100,000 per account.

brendanb438 · #4 08-23-2007, 07:39 PM

[ QUOTE ]
Only up to $100,000 per account.

[/ QUOTE ]

I wish we all had this worry right now.

-Brendan

Shoe · #5 08-23-2007, 08:32 PM

[ QUOTE ]
Only up to $100,000 per account.

[/ QUOTE ]

Actually it is only up to $100,000 per financial institution. So if you have more than $100k you should spread it across several banks, not multiple accounts at the same bank. And if you have that much money it shouldn't all be in a savings account, but i'm not going to go into that here.

I also wish I had this problem.

cbloom · #6 08-23-2007, 08:36 PM

BTW any good refs on how the FDIC works? Is it taxpayer subsidized?

It seems to that starting a bank is this amazing free way to speculate with other people's money and get bailed out if you screw up. I believe the law is that you have to keep 5% of the deposits in cash, and the rest you can speculate with. If you do well, you keep the profit for yourself. If you screw up, oh well, close the bank and let the FDIC fix the mess.

I read some stuff about the history of the Savings & Loan crisis, where they had relazed a bunch of the rules in the years leading up to that, but even the stricter rules still just seem crazy loose.

gordongecko · #7 08-24-2007, 03:17 AM

It is not quite that simple cbloom, but you are partially correct. Banks still have to justify said speculation... which is why banks are scrutinized on most commercial developments. Not to mention the money you would need to start a bank, and the regulations, red tape, etc. It's not something your average investor has the funds to accomplish.